What are my closing costs if I am the Seller?

Every market has closing costs associated with each side of a real estate transaction that are customary to either the buyer or seller in that local market.  If you are considering selling your home in Texas, you may need to plan that the following costs are customarily paid by a home seller:

Broker’s marketing fee – This fee is usually stated as a percentage of the final sales price of the home.  This fee covers the costs associated with marketing the home, compensates the listing broker, and compensates the listing agent.  For example, this fee may be 3% of the sales price.

Buyer agent compensation – This cost is also usually stated as a percentage of the final sales price of the home.  This fee is compensation for the buyer’s broker and agent for procuring the buyer for the home.  For example, this fee may also be 3% of the sales price.

Owner’s title policy – An owner’s title policy is customarily purchased by the seller for the new buyer and it insures that the buyer has clear title to the property.  Title insurance rates are regulated by the Texas Department of Insurance and are arrived at by a formula based on the sales price of the home.  To estimate a title policy cost, enter the home’s sales price into this Texas Title Premium Calculator , provided online as a courtesy by Old Republic Title.

Home warranty – In Texas, it is customary that the buyer ask a home seller to provide a one-year home service contract, or home warranty, on the property.  This warranty is provided by a third-party company and the cost is charged to the seller at closing.  The cost for such warranties range from $350 – $600 depending on the size and features of the home and type of coverage selected.

Escrow fee – Charged by the title company to facilitate the closing of the transaction, this fee covers the overall servicing of the transaction and the escrow of funds.  The total escrow fee is customarily spilt equally between the buyer and seller, and may range from $200 – $350 for each party.

Recording fees – Texas counties assess recording fees to record documents into public record, such as the release of mortgage liens, or the transfer of a deed.  Recording fees range from $15 – $25 per document.

Miscellaneous fees – Additional costs may be incurred during the processing of the transaction including messenger fees and attorney fees for document preparation.

Proration of property taxes – The promulgated Texas real estate contract provides that the property taxes will be prorated through the day of closing.  As such, if the annual property taxes have not been paid, the seller should plan on crediting the buyer for the proration at closing, while the buyer will be responsible for the full amount of annual taxes due at the end of the year.

Please keep in mind that this list was created to help consumers identify closing costs that are generally customary for a seller in most Texas real estate markets.  As the case with all terms of a real estate transaction, everything is negotiable and as agreed upon between the buyer and the seller of the property.

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